Research has shown that banks and financial institutions that have signed up to net zero pledges are still investing heavily in fossil fuels and they are being labelled as “climate arsonists”.
Recall that the former Bank of England governor, Mark Carney launched the Glasgow Financial Alliance for Net Zero (GFANZ) initiative as one of the main UK achievements in hosting the Cop26 UN climate summit at Glasgow in 2021.
At the time, the UK boasted that 450 organisations in 45 countries with assets of more than $130tn had signed up to GFANZ and would align their investments with the goal of limiting global temperature rises to 1.5C above pre-industrial levels.
However, data compiled by the pressure group Reclaim Finance show members of GFANZ have poured hundreds of billions into fossil fuels since when the initiative was launched.
Read also: Researchers at MSU urge politicians to protect climate change refugia
According to Reclaim Finance, at least 56 of the biggest banks in the net-zero banking alliance grouping (NZBA) have provided $270bn to 102 fossil fuel companies for their expansion, through 134 loans and 215 underwriting arrangements,
“GFANZ members are acting as climate arsonists. They’ve pledged to achieve net zero but are continuing to pour hundreds of billions of dollars into fossil fuel developers. GFANZ and its member alliances will only be credited once they up their game and insist that their members help bring a rapid end to the era of coal, oil and fossil gas expansion,” Paddy McCully, a senior analyst at Reclaim Finance was quoted to have said.
The same report shows that GFANZ companies are also failing to divest from fossil fuels as at least $847bn in assets in more than 200 fossil fuel companies were held by the 58 largest members, as of last September and few of the GFANZ members had put in place watertight investment policies that would stop them financing new fossil fuel projects, even though all are supposed to be shifting their portfolios to be in line with the 1.5C goal, confirmed at Cop26.
“It is business as usual for most banks and investors [involved in GFANZ], who continue to support fossil fuel developers without any restrictions, despite their high-profile commitments to carbon neutrality. Their greenwashing is all the more damaging as it casts doubt on the sincerity of all net zero commitments and undermines the efforts of those who are truly acting for the climate,” Lucie Pinson, executive director and founder of Reclaim Finance, accused the alliance of greenwashing.
Adapted from the Guardian.
